The UK and its allies have been “too soft” on China and the World Trade Organisation (WTO) needs to get tough on Beijing’s unfair trade practices, according to international trade secretary Liz Truss.
Truss told a Westminster committee today that the UK wants “to improve our toolkit multilaterally and unilaterally” through putting in new subsidies rules for things like steel and aluminum.
She also said the WTO cannot continue to classify China as a developing country, which means it benefits from looser rules on trade, and that she would make this point a key part of the UK’s G7 chairmanship this year.
China has been widely accused of stealing intellectual property and trading with goods that have been made with forced labour or do not comply with environmental standards – charges the country denies.
It also gives large subsidies to its steel and aluminium sectors, giving these sectors a further competitive advantage over competitors.
Truss told parliament’s International Trade Committee that she wanted to work with the WTO to place more stringent rules on unfair trade practices and would speak with US Trade Representative Katherine Tai about this today.
The international trade secretary said this included things like increased “transparency of declaration of industrial subsidies” and “how rules can be updated at the WTO to include more categories of subsidies”.
“We have been too soft on China’s unfair trading practices for too long,” Truss said.
“The WTO was created in 1995 when the Chinese economy was one-tenth the size of the US economy. Yet China is still treated as a developing country at the WTO.
“We can see the impact on the steel industry where the market is 40 per cent over capacity and around 85 per cent of aluminum subsidies in recent years have gone to just five Chinese firms.”
Truss is hosting a series of meetings with trade ministers from other G7 countries throughout this year.
The specialised “trade track” meetings are the first to be held by the G7.
“This is about democracies working together to make sure the global trading system is supporting democratic free enterprise,” Truss said.
“Making sure to deal with unfair subsidies through state aid enterprises, making sure we’re dealing with unfair practices from non-market economies.”